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TWN
Info Service on WTO and Trade Issues (Sept21/02) Washington DC, 1 Sep (D. Ravi Kanth) – The developing and least-developed countries apparently remain concerned over the prospect of a short shrift to their core demands concerning robust special and differential treatment (S&DT) to develop their nascent fisheries sector as well as the requisite policy space, as the final phase of negotiations on fisheries subsidies begin on 1 September, said people familiar with the development. Fresh doubts are being cast as to whether the chair of the Doha fisheries subsidies negotiations, Ambassador Santiago Wills from Colombia, would genuinely respect the concerns expressed by more than 80 trade ministers on 15 July on addressing the gross imbalances in his draft text, said people familiar with the development. That draft text (TN/RL/W/276/Rev.1) issued by the chair in his own capacity on 30 June contains provisions that would guarantee reverse special and differential treatment for the big subsidizers such as China, the European Union, the United States, Japan, Korea, Chinese Taipei, and Canada to continue with their industrial-scale fishing. The trade ministers, at a virtual ministerial meeting on 15 July, allegedly expressed their sharpest concern that the draft text has failed to live up to the mandate outlined in the United Nations Sustainable Development Goal (SDG) 14.6, which was later reiterated in the Buenos Aires ministerial decision in December 2017. That mandate clearly stated: “1. Building on the progress made since the 10th Ministerial Conference as reflected in documents TN/RL/W/274/ Rev.2, RD/TN/RL/29/Rev.3, Members agree to continue to engage constructively in the fisheries subsidies negotiations, with a view to adopting, by the Ministerial Conference in 2019, an agreement on comprehensive and effective disciplines that prohibit certain forms of fisheries subsidies that contribute to overcapacity and overfishing, and eliminate subsidies that contribute to IUU [illegal, unreported and unregulated] fishing recognizing that appropriate and effective special and differential treatment for developing country Members and least developed country Members should be an integral part of these negotiations. “2. Members re-commit to implementation of existing notification obligations under Article 25.3 of the Agreement on Subsidies and Countervailing Measures thus strengthening transparency with respect to fisheries subsidies.” However, the chair, reflecting the positions of the US, the EU and other developed countries, has allegedly undermined the much-needed S&DT for developing countries who were in no way responsible for the global depletion of fish stocks. The developing countries are being provided with S&DT of two years’ duration in the IUU fishing pillar, two years in the overfished stocks pillar, and five years in the overcapacity and overfishing (OC&OF) pillar, together with burdensome transparency and notification requirements. Despite the serious concerns expressed by trade ministers at the 15 July meeting, who demanded that all their proposals must be incorporated in the three pillars of the negotiations – the IUU pillar, the OC&OF pillar, and the overfished stocks pillar – attempts are now being made to turn a deaf ear to the developing countries’ concerns, said people, who asked not to be quoted. In what appears to be a clever move adopted by the chair, the developing countries will be provided an opportunity to express their specific concerns and propose new textual proposals during the first phase of negotiations between 1-10 September. But there is no guarantee that the chair will appropriately accommodate the proposals in the text to be finalized between the second fortnight of September and the first fortnight of October. Earlier, the “schedule of work for the fall of 2021” issued by the chair on 30 July suggested a course-correction to make the re-revised draft fisheries text appear more amenable to all members, said trade envoys familiar with the development. In his email to members on 30 July, the chair said the first phase ending on 10 September “will be an opportunity for me to reach out to delegations, for delegations to reach out to me and for delegations to engage with each other.” However, it remains to be seen whether the first phase will result in a serious engagement on the concerns raised by the developing countries or is merely a “charade” of providing an opportunity to the developing countries to voice their concerns, said a person, who asked not to be quoted. During the intensive phase of negotiations from 13 September to 8 October, the chair said “there will be text-based negotiations on key macro issues; that is, substantive issues on which views remain divergent.” However, he did not clarify the outstanding macro issues on which countries remain sharply divided, the person said. “The objective of this stage,” said Ambassador Wills, “is to work together to evolve the draft text such that it can serve as a basis for the second stage of the process.” He clarified that “the aim must be to adjust the existing draft text by adding to it, deleting from it, or amending it so the result can be a text that is as clean and clear as possible with as few brackets as possible.” “This means collectively improving the text by making it more convergent in these critical areas,” he added, with the caveat that “it does not mean creating lists of each Member’s preferred language, a process that we left behind three years ago and to which we cannot return if we are to conclude our work this fall.” The chair has indicated that there will not be wholesale changes made to the current draft consolidated text (TN/RL/W/276/Rev.1). Surprisingly, he claimed that “as such, there is no exhaustive or definitive list of all issues to be taken up during this stage. That said, based on the views from Ministers on 15 July, and from HoDs [Heads of Delegation] thereafter, I would suggest that our work include the following issues.” The issues mentioned by the chair include: 1. The issue of balance, particularly in the overcapacity and overfishing pillar with respect to Articles 5.1.1 (including footnote 10) and 5.5 of the draft text in TN/RL/W/276/Rev.1, and related transparency and notification requirements in Article 8.4; 2. The disciplines on subsidies to fishing in areas beyond the subsidizing Member’s jurisdiction and in high seas, in Articles 5.2 and 5.3 of the draft text respectively; 3. The issue of automaticity of the subsidy prohibition in the illegal, unreported and unregulated fishing pillar; 4. Transparency and notification requirements in Article 8.4, including those related to special and differential treatment; and to elements previously discussed that are not currently reflected in the draft text. On the first issue, the chair seems to have admitted for the first time that the specific carve-out that he mentioned in Article 5.1.1 for the ten large industrial-scale fishing countries such as China, the European Union, the United States, Japan and Korea among others that was opposed by many trade ministers at the 15 July meeting, will now be balanced with Article 5.5 concerning special and differential treatment. The chair appears to be suggesting a measure of balance between the subsidy carve-out for the ten big subsidizers, who have created the problem of over-capacity and over-fishing as well as being responsible for the depletion of fish stocks globally, and the special and differential treatment for developing and least-developed countries who did not in any way contribute to the global depletion of fish stocks, said people who asked not to be quoted. Yet, the chair has linked the S&DT provisions with onerous transparency and notification requirements in Article 8.4, said people, who asked not to be quoted. According to Article 5.1.1 in the revised draft consolidated text issued on 30 June, “a subsidy is not inconsistent with Article 5.1 (where all prohibited subsidies are listed) if the subsidizing Member demonstrates that measures are implemented to maintain the stock or stocks in the relevant fishery or fisheries at a biologically sustainable level.” In contrast, Article 5.5 concerning special and differential treatment includes the following two alternatives: [ALT 1 5.5 (a) The prohibition under Article 5.1 shall not apply to subsidies granted or maintained by LDC Members for fishing or fishing related activities. (b) The prohibition under Article 5.1 shall not apply to subsidies granted or maintained by developing country Members for fishing or fishing related activities within their territorial sea. (c) The prohibition under Article 5.1 shall apply to subsidies granted or maintained by developing country Members, including LDC Members, for fishing or fishing related activities within their EEZ [Exclusive Economic Zone] and the area of competence of RFMO/A [Regional Fisheries Management Organization/Arrangement] if all the following criteria are met: i. the Member’s GNI per capita exceeds US$5,000 (based on constant 2010 US dollars) for three consecutive years; ii. the Member’s share of the annual global marine capture fish production exceeds 2% as per the most recent published FAO data; iii. the Member engages in distant water fishing; and iv. the contribution from Agriculture, Forestry and Fishing to the Member’s annual national GDP is less than 10% for the most recent three consecutive years.] Alternative 2 drastically limits the special and differential treatment to a period of five years by suggesting various conditions. They include: (a) The prohibition under Article 5.1 shall not apply to subsidies granted or maintained by LDC Members for fishing or fishing related activities. (b) The prohibition under Article 5.1 shall not apply to subsidies granted or maintained by developing country Members for low income, resource-poor and livelihood fishing or fishing related activities up to 12 nautical miles measured from the baselines. (c) For subsidies other than those referred to in sub-paragraph (b), a developing country Member may grant or maintain the subsidies referred to in Article 5.1 for fishing and fishing related activities within its EEZ and the area of competence of a relevant RFMO/A for a maximum of [5] years after the entry into force of this [Instrument]. A developing country Member intending to invoke this provision shall inform the [Committee] in writing before the date of entry into force of this [Instrument]. (d) If a developing country Member whose: i. share of the annual global volume marine capture fish production does not exceed [0.7%] as per the most recent published FAO data; and ii. subsidies to fishing or fishing related activities at sea do not exceed US$ [25 million] annually deems it necessary to apply subsidies referred to in sub-paragraph (c) beyond the [5] years provided for in that sub- paragraph, it shall not later than one year before the expiry of the applicable period enter into consultation with the [Committee], which will determine whether an extension of this period is justified, after examining all the relevant needs of the developing country Member in question. If the [Committee] determines that the extension is justified, the developing country Member concerned shall hold annual consultations with the [Committee] to determine the necessity of maintaining the subsidies. If no such determination is made by the [Committee], the developing country Member shall phase out the remaining subsidies prohibited under Article 5.1 within two years from the end of the last authorized period. Ambassador Wills also suggested Article 5.2 which states: (a) No Member shall grant or maintain subsidies contingent upon, or tied to, actual or anticipated fishing or fishing related activities in areas beyond the subsidizing Member’s jurisdiction (whether solely or as one of several other conditions), including subsidies provided to support at-sea fish-processing operations or facilities, such as for refrigerator fish cargo vessels, and subsidies to support tankers that refuel fishing vessels at sea. (This is clearly directed at China). (b) Sub-paragraph (a) shall not apply to the non-collection from operators or vessels of government-to-government payments under agreements and other arrangements with coastal Members for access to the surplus of the total allowable catch of the living resources in waters under their jurisdiction, provided that the requirements under Article 5.1.1 are met. (It appears to be a carve-out for the EU). The chair suggested that “these negotiations must be Member-led.” “I would underline that this is not only a right but also an obligation; and this depends on all of you reaching out to your counterparts, particularly those that do not share your views, to identify ways to bring your positions closer together,” he said. “This will be an essential complement to the work done in and by the Negotiating Group as such. Of course, if it would be helpful, I am ready to facilitate or observe any meetings that any delegation may organize with others.” As regards the second stage during the three weeks beginning on 11 October and ending on 29 October, the chair has suggested that members “meet in open-ended format every day to go through the entire draft text clause-by- clause.” According to Ambassador Wills, “the objective, as affirmed by Ministers on 15 July, will be to produce a fully- agreed clean text, ahead of MC12.” “This will be an intensive and, no doubt at times uncomfortable, process as we will need to cover every article of the draft text from the legal, political and technical perspectives as we seek to resolve all of the remaining issues,” he maintained. In short, there seem to be too many imponderables about the progress of the negotiations and whether the developing countries will be able to hold their ground in securing appropriate and effective S&DT in line with the principle of common but differentiated responsibilities outlined in the climate change agreement.
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